Managers, business partners of HK-listed company arrested over alleged HK$12 billion false accounting scheme

27-Nov-2020 Intellasia | South China Morning Post | 7:25 AM Print This Post

Seven people, including former managers of a Hong Kong-listed commodity trading company, have been arrested on suspicion of conspiring to provide false accounting involving nearly HK$12 billion.

Four men and three women, aged 31 to 62, were detained when detectives from the commercial crime bureau and the Securities and Futures Commission raided the firm’s offices and those of its business partners on Tuesday, according to police.

The name of the firm was not released by police, but a force insider identified it as Long Well International Holdings Limited, formerly Tou Rong Chang Fu Group Limited.

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The firm also said in an announcement on Tuesday that police and the commission had paid them a visit that day.

The trading of shares in Long Well, which deals in commodities and chemical products, property investment, money lending and crude oil, has been suspended since July 2018.

Those arrested comprised the company’s former management and its business partners, who allegedly conspired to fabricate multiple false trades to exaggerate revenue during the financial years of 2016 and 2017 involving a sum of HK$11.88 billion (US$1.5 billion), a police spokesman said. All the suspects were still detained.

“An investigation is ongoing. Police will take the next steps at the right time,” the spokesman said.

Long Well’s board of directors said in a notice on Tuesday that officers from the commercial crime bureau and the Securities and Futures Commission had come to the group’s offices with search warrants on Tuesday as part of an investigation under the Theft Ordinance and the Securities and Futures Ordinance.

Certain records and documents were taken away, but the business and operations of the group had not been adversely affected by the investigations, the company maintained, adding that it had extended and would continue to extend its full cooperation to the investigators.

Trading in the company’s shares on the Stock Exchange will remain suspended.

The police action was the second such raid involving suspected false accounting in listed companies in a week.

On Thursday, an ex-chair and four former senior executives of Champion Technology Holdings Limited and Kantone Holdings Limited were among eight people arrested in connection with an HK$8.5 billion (US$1.09 billion) false accounting case.


Category: Hong Kong

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